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All news by: Winnie Tsui

Hong Kong Government Proposes Changes on the Foreign Source Income Exemption Regime for Passive Income

In October 2021, the EU included Hong Kong on the watchlist of non-cooperative jurisdictions for tax purposes.  The EU is of the view that the FSIE regime in Hong Kong may result in double non-taxation for offshore passive income as it does not require any conditions on the recipient entities or requirement of substantial economic presence in Hong Kong. If Hong Kong does not address the concern of the EU timely, it will be blacklisted by the EU for tax purposes.  Hong Kong-based entities may face defensive measures by the EU member states in the tax area.